Moody's eyes SATO for downgrade

Moody's Investors Service said it placed on review for downgrade the Baa3 long-term issuer and senior unsecured bond ratings of SATO Oyj and changed the outlook to ratings under review from stable.

“The rating action reflects risks related to SATO's upcoming refinancing needs because of its short-dated debt maturity profile (about 54% of total debt is due in 2023-2025) in the context of more challenging capital market conditions including rising interest rates and widening credit spreads. Overall, the refinancing risk in the European real estate sector has significantly increased leaving public bond markets largely unattractive and we hence expect companies, including SATO, to revert to secured bank financing,” Moody’s said in a press release.

The agency said its review will focus on SATO’s refinancing strategy, plans to maintain EBITDA interest coverage at or above 2.5x and strategy to managing its balance sheet in a higher interest cost environment and its strategy to create a buffer in effective leverage to handle market value declines in its property portfolio that Moody’s said it believes are inevitable in the present economic environment.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.